The impact of covid-19 on the European stock market

Abstract

The emergence of the novel coronavirus has posed a global health emergency, significantly impacting diverse economic and financial fields. Among these, the stock market experienced asymmetric effects, with certain industries witnessing a sharp decline in revenues, while others observed an exponential surge in demand for their goods and services. Therefore, the primary objective of this study is to analyze the impact of the coronavirus pandemic on the European stock market, with a specific emphasis on the heterogeneous behavior exhibited by different industries. Hence, the daily data of 300 firms based in 13 European countries were analyzed from December 10, 2019, and October 7, 2020, using the event study methodology. The primary finding of this study indicates that the European stock markets were influenced by the pandemic, leading to a mixture of positive and negative effects across various industries and different time horizons. The findings of the study revealed that the utilities, consumer staples, real estate, and health care industries demonstrated positive performance across various time horizons. In contrast, the financials, energy, consumer discretionary, and basic materials industries exhibited the poorest results, aligning with existing literature. The industrials industry displayed a relatively stable performance, albeit with negative results. On the other hand, the technology and telecommunications industries maintained a consistent performance, with positive outcomes observed.

Date of Award	26 Oct 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Alves (Supervisor)